T-Mobile USA could be looking to sell its 7,000 towers in the US to raise a reported US$2bn, the Financial Times speculated, after larger rival AT&T abandoned its US$39bn offer for the group. René Obermann, CEO of Germany’s Deutsche Telekom, which…
T-Mobile USA could be looking to sell its 7,000 towers in the US to raise a reported US$2bn, the Financial Times speculated, after larger rival AT&T abandoned its US$39bn offer for the group.
René Obermann, CEO of Germany’s Deutsche Telekom, which owns T-Mobile in the US, reportedly told analysts and reporters back in February that, if the acquisition was to fall through, then it could seek to offload towers to finance 4G investments.
The now collapsed AT&T/T-Mobile US deal was announced in March.
The FT said interested buyers could include American Towers or Crown Castle.
Industry spectators have been busy proposing a variety of scenarios for both companies in the wake of the failed deal, which collapsed following intense regulatory pressure.
Analysts have highlighted an impending spectrum crunch for the telcos, as demand for capacity continues to skyrocket. This situation was further compounded earlier this year when spectrum owned by US cablecos Bright House Networks, Comcast and Time Warner Cable was taken off the market when it was sold to mobile operator Verizon Wireless for US$3.6bn.
AT&T/T-Mobile’s failed deal has therefore led to reports that the two companies could look for alternative acquisitions/partnerships, notably with US telco Sprint-Nextel and Dish, which over the past year has acquired a series of spectrum assets.
Dish is currently seeking FCC approval to combine the spectrum held by mobile satellite operators TerreStar Networks and DBSD North America, both of which were acquired separately out of bankruptcy protection. The company aims to use the combined 40 MHz of 2GHz S-band frequencies to deploy a hybrid satellite and terrestrial mobile and fixed broadband network.
A note posted by Stifel Nicolaus analysts on 20 December stated: “Although we have no knowledge of M&A discussions between the two parties, [Dish] could very well be the next target for AT&T, in our view … While it certainly remains a possibility that AT&T could try to buy Dish’s spectrum without buying the entire company, we believe [Dish chairman] Charlie Ergen realises he is unlikely to ever get a better offer than from a moderately-desperate AT&T that needs spectrum and needs it quickly, and with the satellite TV industry’s long-term business model being more uncertain than ever, we believe it more likely that AT&T will be forced to buy the entire company.”
However, speculation surrounding AT&T potentially making a bid for either Dish or DTH rival DirecTV is nothing new, while many industry analysts have long predicted that Ergen’s asset building was merely a spectrum play.
Meanwhile, Dish CEO Joseph Clayton has been quoted saying that it could merge its spectrum assets with T-Mobile USA, or another wireless company, to compete with larger players AT&T and Verizon Wireless.
Clayton also reportedly suggested that Dish could potentially partner with mobile operator Sprint Nextel, or with WiMAX wholesaler Clearwire.
